Marriott-Starwood Merger Nears Finish Line

April 4, 2016

Meeting room at Hotel Pulitzer Amsterdam, a Starwood property

The back-and-forth negotiations that began in November when Marriott International, Inc. made its initial offer to acquire Starwood Hotels & Resorts Worldwide, Inc. will likely come to a happy ending on April 8. That’s the date that Starwood stockholders are expected to approve the Marriott-Starwood merger, which will create the largest hospitality company in the world.

Marriott has properties in more than 4,200 locations in 79 countries and territories worldwide. It added nearly 52,000 guest rooms during 2015. For its part, Starwood boasts nearly 1,300 properties in approximately 100 countries.

In the latest turn of events on March 31, Anbang Insurance Group Co., Ltd., J.C. Flowers & Co. and Primavera Capital Limited (known as the “Consortium”) informed Starwood on that it was withdrawing its proposal to acquire Starwood due to “market considerations” and would not be issuing another proposal. Starwood’s board of directors appears to have unanimous support for the merger with Marriott.

“We are excited to be part of the world’s largest hotel company with an unparalleled platform for global growth,” says Thomas B. Mangas, CEO of Starwood. “The existing merger agreement provides substantial value to our stockholders through significant upfront cash consideration and long-term upside potential from projected shared synergies, including $250 million in cost synergies and significant revenue synergies, as well as ownership in one of the world’s most respected companies.”

Marriott-Starwood Merger Timeline

• Starwood accepts a $12.2 billion acquisition offer from Marriott in November

• Starwood opts for a $13.2 billion bid by Anbang on March 17

• Marriott sweetens offer to $13.6 billion, which Starwood accepts

• Anbang allowed to continue negotiations, upping its offer to $14 billion last week

• Anbang pulls out of negotiations on March 31

• Special meeting of Starwood stockholders to vote on and approve the Marriott-Starwood merger agreement will be held Friday, April 8, at 10 a.m. Eastern Time at the Sheraton Stamford Hotel in Connecticut.

“We are focused on maximizing shareholder value and from the beginning of this process we have been steadfast in our belief that a combination with Starwood will offer the highest value to all shareholders,” says Arne Sorenson, president and chief executive officer, Marriott International. “Together, we can provide opportunities for significant equity upside and great long-term value driven by a larger global footprint, wider choice of brands for consumers, substantial synergies, and improved economics to owners and franchisees leading to accelerated global growth and continued strong returns. Our integration teams have been diligent in their work over the last few weeks and are more committed than ever to a timely and smooth transition.”